Create a 6 page essay paper that discusses Businesses in the Long-run.The original industry size can not hold the increased output. However, the size of the expanded industry has to be optimum to ensu

Create a 6 page essay paper that discusses Businesses in the Long-run.

The original industry size can not hold the increased output. However, the size of the expanded industry has to be optimum to ensure that the business is able to avoid diseconomies of scale (Roncaglia 2006 p 582). There are many factors that may affect the effectiveness of a business in the long-run.

For example, technological advancement may either improve the operations hence increased output and reduced cost of production, or it may lead to the obsolescence of the existing technology leading to an extra cost for the business.

A business may experience falling long-run costs through changing the factors of production. There is an optimum level whereby the prices are expected to be maintained, or gradually begin to rise as the factors of production continue to be varied. However, there are situations when the long-run costs may continue falling even after this point is reached, which indicates the capacity of the industry to satisfy the market with greater variation of the inputs. This essay is a critique of why businesses might experience falling long-run costs as well as the effects of this on the competitive process and the structure of industries. It also critiques the reasons why long-run costs might begin to rise, and how a business can try to avoid the rise, to maintain competitiveness in the market.